Random thoughts about stocks, investing, business and philosophy in everyday life
We buy back stock when we think it’s attractively priced relative to our assessment of the intrinsic value of the enterprise. – Robert Berkley on the 1Q2020 conference call. The business: WR Berkley (NYSE: WRB) is an insurance and reinsurance company. They do mostly business like excess and surplus lines and specialty insurance. These lines of insurance are less standardized
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Essity is a Swedish consumer staple listed on Stockholm Stock Exchange with the ticker Essity. It has dual share-listing where the A-shares carries more voting rights than the B-shares. Essity has only been listed a few years after it was spun off from SCA into a separate entity. SCA continues to operate as a forest products company – SCA is
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I’m wealthy enough where I don’t need to own a tobacco company & deal with the consequences of public ownership. -Warren Buffett. ESG investing is on the rise as unethical stocks come with a lot of baggage for publicly followed investors. If you’re a closely followed investor, which obviously Warren Buffett is, you are guaranteed to get asked a lot
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Before you continue reading I want to emphasize that the portfolio below is no recommendation to buy or sell the mentioned securities. I’m no investment advisor. Please do your own due diligence. Below you find a portfolio of 10 stocks that can be labelled as “unethical”. These “sin”-stocks produce goods and services that are legal, but still many institutions are
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Introduction and summary: Entra (Eiendom) (tickercode is Entra) is a Norwegian real estate company – owner and manager – listed on Oslo Stock Exchange. It was recently included in the OBX-index, the main index that tracks the 25 most liquid companies. The market cap is 22 billion NOK, pretty modest by international standards. Entra will not set the world on
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The last decade has produced fantastic returns in most global asset classes (commodities excluded), helped by enormous interventions by central banks. Can we expect similar high returns in the coming decade? The “new normal” (?): The “new normal” seems to be a low interest policy for the foreseeable future. How do we adapt as investors? Japanese investors have battled with
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Most people invest in real estate, perhaps quite logically since this is a very easy business model to understand. Equity (stocks) is perceived as more risky and thus less desirable as an investment. The aim of this article is to give some pros and cons with both asset classes (I’m considering direct investments – not mutual funds). There is no
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Harry Markowitz won the Nobel Prize in 1990 for his work in showing mathematically how you can both reduce risk and create better returns by diversifying across regions and assets. Risk is of course measured in volatility, ie. how your assets fluctuate in price. Such a theory was new when it was first released in the 1950s, and Markowitz said
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Introduction and summary: In an article a few weeks back I wrote an article about the logic behind buying shares in quality companies, given that they are trading at fair multiples. Warren Buffett and Charlie Munger are, not surprisingly, correct in saying that it’s far better to buy a wonderful company at a fair price than buying a fair company
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No matter how good strategies you have, they are most likely worthless if you can’t execute them properly. What looks like a piece of cake on paper, is completely different in the real world when you are risking your own hard earned money. Will the strategy continue to perform after a drawdown? Is it just a temporary setback? The future
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Summary and introduction: Research shows that the majority of investors underperform the broad market indices. The most likely reason is due to frequent buying/selling and behavioral mistakes. When you are trying to “outsmart” the markets, you most likely end up losing to the market. To successfully invest you actually need to do as little as possible. What is required of
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Introduction and summary: I have been a shareholder in Accenture for many years and the only regret I have is that I don’t have a bigger position. Accenture is a stock I intend to own and add on meaningful pullbacks. Accenture is a mature company, but there is a lot to like about the business model: easy to understand, tailwind
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“Compound interest is the eight wonder of the world. He who understands it, earns it….he who doesn’t, pays it” -Albert Einstein Presumably Albert Einstein said the words above, and likewise Benjamin Franklin said that time is money. Unfortunately, we seem to forget these very simple principles when it comes to most decision making – be it learning, investing or in
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Numerous studies suggest women are better investors than men, which of course might hurt the egos of many men. I find this fascinating, and it most likely confirms why it makes sense to make investing as simple as possible. Charlie Munger once said the best thing to do is to “sit on your ass” and let your capital compound without
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Introduction and summary: I have been a shareholder in Accenture (ACN) for a long time and this has turned out to be one of my best investments. It’s a pretty uncomplicated business model, at least up until now, where the main assets are the employees and the culture. We can roughly say the business model is to hire people, rent
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Introduction and summary: Many investors have a strong focus on dividends, so much that I would like to call it an irrational dividend bias. Dividend investors focus only on dividend stocks, and for the most part ignore those stocks which don’t pay a dividend. Thus, they leave out a huge segment of the market that has the potential of compounding
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Summary: S&P has an estimated P/E of 23 for 2020. Rich valuations sometimes make the best companies’ share price languish. Low interest rates justifies high valuations. Indexers might suffer more from high valuations than active investors. How important are growth and valuations? I look at theoretical returns under different valuations and growth. It turns out Warren Buffett is right: It’s
Continue readingThis week I was interviewed about my trading philosophy. In the interview I mentioned how difficult it is to make money daytrading or swingtrading for short-term profits. This is mainly a zero-sum game, I will even say it has negative expectancy due to commissions and slippage. Opposite, long-term investing has a positive expected return, given a diversified portfolio, as long
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This article covers these topics: Why dividend investing is not necessarily the most efficient way to compound capital. Dividends are paid out of book value, but usually reinvested above book value. Why accept to receive a dividend at book value when you can for example sell shares at two times book value? Where is the best place for your capital?
Continue readingMost traders and investors have heard that you need to sell in May and go away. Is this just a myth or is it correct? Let’s find out by looking at the historical numbers: My data is the S&P 500 index from 1960, downloaded from Yahoo/finance, until end of April 2020. The index doesn’t include dividends and is thus excluding
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Perhaps surprisingly, I believe Lukoil, the Russian oil giant, is the best oil stock to own among the oil majors. Despite being a Russian company, it’s managed well due to the CEO being the biggest shareholder in the company. Management has skin in the game. I bought shares in the fall of 2015 at 34 USD, which has produced a
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Poker, Sex and Dying is the title of a book by Juel Anderson published some time in the early 1980s. Some years after publication it was out of print and somewhat forgotten, but accidentally option investor David Caplan found a copy in a second hand store. He was so impressed by the the content that he purchased the copyrights and
Continue readingThis is a very short article based on two much longer articles: Don’t be fooled by your dividend bias – sell shares to create “income” Dividend investing: Don’t be fooled by your dividend bias – marginal rate of return/incremental return Don’t be fooled by your dividend bias: DRIP is inferior to internal compounding On the 30th of April 2020 Royal
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Investors Title (listed on Nasdaq with the tickercode ITIC) was for me an unknown company until about a week ago when I came across this article on Seeking Alpha written by Capital Ideas. The article is an interesting deep-dive into a highly profitable and well-managed small-cap (market cap is only 260 million). My article is mostly a recap of Capital
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Philip Morris International (from now on PMI) is probably one of the most “hated” companies on the planet. This black sheep is literally black-listed by all institutions bar a few brave vice funds, which means PMI and other tobacco stocks have a huge base of retail shareholders, just like myself. PMI is a sin stock, a topic I wrote about
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